Liberty Global Inc. (LBTYA): Is There Freedom in Loving This Stock?

by David Woodburn on December 5, 2013

Liberty Global Inc. (NASDAQ:LBTYA) has been among several Internet providers being asked by European Union authorities to utilize their power of the plug and block access to any sites that contain copyright-infringing, or pirated, content. If these companies do not comply with the request, Eu officials said they can force it to happen. Liberty Global Inc. owns UPC austira, an ISP in the European country, which was sued by a couple of production companies that said the ISP allowed access to a website that featured movied online produced by the companies. Despite this setback legally, Liberty Global Inc. has seemed to be doing many thing right as shown by the change in hedge-fund sentiment toward the company and the stock.

Liberty Global Inc. (NASDAQ:LBTYA) has seen an increase in hedge-fund interest in recent months. LBTYA was in 81 hedge-fund portfolios at the end of September. There were 78 hedge funds with LBTYA holdings at the end of the previous quarter.

Hedge fund activity in Liberty Global Inc.

At the end of the third quarter, 81 of the hedge funds tracked by our friends at Insider Monkey were bullish in this stock, an increase of 4 percent from the second quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge-fund managers who were upping their holdings substantially.

According to Insider Monkey’s comprehensive database, Coatue Management, managed by Philippe Laffont, holds the most valuable position in Liberty Global Inc. (NASDAQ:LBTYA). Coatue Management has a $409.2-million position in the stock, comprising 4.2 percent of its 13F portfolio. Coming in second is John Griffin of Blue Ridge Capital, with a $329.7-million position; 3.9 percent of its portfolio is allocated to the company. Other hedge funds that are bullish include D. E. Shaw’s D E Shaw, Lee Ainslie’s Maverick Capital and Stephen Mandel’s Lone Pine Capital.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Amici Capital, managed by Paul Orlin and Alex Porter, initiated the most valuable position in Liberty Global Inc. (NASDAQ:LBTYA). Amici Capital had $71.4 million invested in the company at the end of the quarter. Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital also initiated a $30.5-million position during the quarter. The other funds with new positions in the stock are Quincy Lee’s Ancient Art (Teton Capital), Alec Litowitz and Ross Laser’s Magnetar Capital, and Jay Petschek and Steven Major’s Corsair Capital Management.

How are insiders trading Liberty Global Inc.?

Insider buying is most useful when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day timeframe, Liberty Global Inc. (NASDAQ:LBTYA) has seen zero unique insider purchases and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge-fund and insider activity in other stocks similar to Liberty Global Inc. (NASDAQ:LBTYA). These stocks are Viacom, Inc. (NASDAQ:VIAB), Time Warner Cable Inc (NYSE:TWC), Virgin Media Inc. (NASDAQ:VMED), DISH Network Corp. (NASDAQ:DISH) and Discovery Communications Inc. (NASDAQ:DISCA). This group of stocks belongs to the cable television systems industry and their market caps are similar to LBTYA’s market cap.

As the table shows, Liberty Global Inc. (NASDAQ:LBTYA) is the most-popular stock holding among this group, and has the least amoutn of insdier activity. Only Viacom, Inc. (NASDAQ:VIAB) has the same amount of insider inactivity over the past six months. With the results shown by the aforementioned time-tested strategies, retail investors should always keep an eye on hedge-fund and insider trading activity, and Liberty Global Inc. (NASDAQ:LBTYA) is an important part of this process.